Under the terms of the 10-year search and advertising partnership they announced this morning, Microsoft’s Bing search technology will be used to power search on Yahoo’s mobile sites. However, executives emphasized that the arrangement was not exclusive and that Yahoo (NSDQ: YHOO) could eventually choose another partner if it wanted. “We have the option for using Microsoft (NSDQ: MSFT) technology for the mobile web experience, (but) it’s not exclusive as it is for the PC,” said Yahoo CEO Carol Bartz during a conference call. “We will start exercising the right to do that.” For his part, Microsoft CEO Steve Ballmer said there was still uncertainty about how the mobile search market would work out. “We don’t know what we don’t know,” he said, adding that the non-exclusivity gave Yahoo additional flexibility.
The arrangement will immediately propel Microsoft’s search engine from a negligible player into a major one in the mobile search market. The most recent comScore (NSDQ: SCOR) figures showed that Yahoo had 34.6 percent of the mobile search market in the U.S., while Google had 63 percent. Those figures are somewhat misleading, however, since a deal to make Microsoft the default search provider on Verizon (NYSE: VZ) phones is just beginning to roll out and should add significantly to Microsoft’s share. Together, Microsoft and Yahoo will dominate the U.S., by having exclusives with not only Verizon, but also AT&T (NYSE: T) and T-Mobile USA. Sprint (NYSE: S) Nextel is the only carrier working with Google (NSDQ: GOOG). In all, Yahoo has about 70 operator relationships worldwide.
Bartz, meanwhile, said during the call that by having Microsoft power its mobile search engine, the company would be able to invest in other mobile areas. “We are very interested in doubling down on the mobile experience,” she said. “(This) frees us up to invest in other areas of the mobile experience.”
This will be a major step forward in the advancement of the internet…